Arizona 57th Legislature, 1st Regular Session Update
Posted by [email protected] on Jan. 28, 2025 / Subscribe 0
The Arizona 57th Legislature, 1st Regular Session is active and in session. While legislative activity at the Capitol has been fairly light up to this point, things are expected to significantly pick up over the next few weeks.
Most legislative standing committees have hit the ground running and already have packed agendas.
Currently, 968 bills have been filed along with 65 memorials and resolutions. The bill total is currently running ahead of last year at this time when 829 bills had been filed along with 59 resolutions. The deadline for submitting bills is February 3rd in Senate and February 10th in House.
Below are a few bills that we would like to highlight as we will be tracking and watching them this session.
DIFI Sunset Review/Agency Continuation
On Monday afternoon, the Senate Finance Committee of Reference will hear the Sunset Review of the Arizona Department of Insurance and Financial Institutions. The House Commerce Committee of Reference heard DIFI’s sunset review last week. Senator David Livingston is running the continuation bill, HB 2210 DIFI; Continuation. It was assigned to the House Commerce Committee earlier this week. HB 2210 would allow the Department of Insurance and Financial Institutions to continue for an additional 8 years.
Health Insurance
HB 2130 Claims; Prior Authorization; Denials; Contact (Bliss): HB 2130 is currently awaiting a hearing in the House Health & Human Services Committee. We are currently working on an amendment with the Arizona Medical Association. The bill, in its current form, proposes to amend the Arizona Revised Statutes by adding a new section, 20-3103, which focuses on the timely payment of health care insurance claims. Under the new provisions, if a health care insurer denies a claim or prior authorization, they are required to provide a detailed explanation for the denial and the contact information of a specific individual or department that can address any questions regarding the denial.
HB 2175 Claims; Prior Authorization; Conduct (Willoughby): HB 2175 is still awaiting a committee assignment. We are currently working on an amendment with the Arizona Medical Association. The bill proposes to amend the Arizona Revised Statutes by adding a new section, 20-3103, which focuses on the timely payment of health care insurance claims. Under the new provisions, health care providers are required to individually review each claim for health care services before a health care insurer can deny it, with specific exceptions for denials related to administrative completeness, member enrollment status, or categorical exclusions. Additionally, the bill explicitly prohibits the use of artificial intelligence in the denial process for claims or prior authorizations. Furthermore, the bill establishes that a health care provider who denies a claim or prior authorization without conducting an individual review is committing an act of unprofessional conduct. It also clarifies the definition of "health care provider" by referencing various titles and chapters under Arizona law that pertain to certification or licensing.
HB 2674 Preauthorization Prohibition; Addiction Medications (Blackman): HB 2674 was introduced this week. The bill prohibits AHCCCS from imposing preauthorization or step edit requirements for any FDA-approved medication used to treat opioid use disorder, effective October 1, 2026. Currently, there are no specific restrictions on preauthorization or step edit requirements for these medications. HB 2674 is still awaiting a committee assignment.
SB 1102 Pharmacy Benefits; Prescribing; Exemption (Shamp): SB 1102 will be heard in the Senate Health & Human Services Committee on Wednesday. The bill proposes to amend Arizona Revised Statutes by adding new sections that regulate the practices of pharmacy benefit managers (PBMs) in relation to prescription drug coverage. Under the new provisions, PBMs and health care insurers would be prohibited from limiting or excluding coverage for a prescription drug that has been previously approved for a covered individual, as long as the individual remains insured and the drug is still part of their treatment plan. Additionally, if a formulary change occurs that affects drug coverage, the PBM or insurer must provide advance notice to both the covered individual and their prescribing provider, detailing the process for requesting continued coverage of the affected drug. The bill also establishes a clear process for requesting formulary exceptions, requiring timely responses from PBMs and insurers to such requests. It mandates that formulary exceptions be granted under specific conditions, such as prior approval of the nonformulary drug and documented medical necessity. Furthermore, the bill clarifies that it does not prevent health care providers from prescribing necessary medications or PBMs from managing their formularies, as long as they comply with the new regulations. The provisions would take effect for contracts and policies entered into or renewed after December 31, 2025.
SB 1200 Mandated Health Coverage; JLBC; Analysis (Leach): SB 1200 was introduced this week. The bill proposes several updates to the current statutes regarding health insurance mandates and cost-sharing restrictions. It introduces new language that requires organizations or individuals advocating for health coverage mandates or cost-sharing restrictions to submit a report assessing the social and financial impacts of such proposals. The report must now include an evaluation of the effectiveness of the proposed treatment or service, as well as the impact on other policyholders who do not utilize the mandated coverage. Additionally, it mandates an analysis by the joint legislative budget committee if the report is not completed, focusing on the financial implications for state employee health coverage. Furthermore, the bill removes certain phrases from the existing law, streamlining the requirements for the report. It eliminates the need to assess the effectiveness of the treatment or service as a separate factor, instead integrating it into the overall evaluation. The bill also emphasizes the necessity for the joint legislative budget committee's analysis to be publicly available and prohibits scheduling a rules hearing for any legislative proposal until this analysis is complete. Overall, these changes aim to enhance the scrutiny of health coverage mandates and their financial implications on state health plans. SB 1200 was assigned to the Senate Finance Committee and is awaiting a hearing.
SB 1257 Impaired Persons; Court-Ordered Stabilization (Leach): SB 1257 was introduced this week. The bill proposes several updates to current statutes regarding the involuntary admission and stabilization of impaired individuals. It introduces new definitions and procedures related to the evaluation and treatment of impaired persons, including the roles of admitting officers and the chief medical officer. Specifically, it allows admitting officers to file petitions for court-ordered stabilization for individuals deemed impaired, detailing the necessary clinical facts and justifications for such actions. The bill also establishes a maximum stabilization period of five calendar days and outlines the rights of impaired individuals during this process, including the requirement for legal representation and the provision of treatment options. Additionally, the bill clarifies the responsibilities of evaluation agencies, including daily assessments of the impaired person's condition and the preparation of post-release care plans. It emphasizes the rights of impaired individuals to refuse treatment, except in emergencies, and mandates that any use of restraints or seclusion be documented and governed by agency procedures. Financial responsibilities for court proceedings and services are also addressed, ensuring that impaired individuals are not charged for services rendered under this article. SB 1257 is still awaiting a committee assignment.
Insurance Operations
HB 2054 DIFI; Financial Enterprises; Insurance; Compact (Livingston): HB 2054 passed out of the House Commerce Committee on Tuesday afternoon, 10-0. The bill, which is being run by DIFI, would update current statutes related to the Department of Insurance and Financial Institutions (DIFI) by changing the licensure year for consumer lenders, escrow agents, and advance fee loan brokers from a fiscal year to a calendar year. Specifically, it would require license renewals to be submitted by December 31 instead of June 30, with expiration dates for several licenses adjusted to January 31. Additionally, the bill would remove references to license continuation dates and allow certain active licensees to defer renewal until December 31, 2025, if their licenses were set to expire by June 30 or September 30, 2025. Moreover, the bill would grant the DIFI director the discretion to adopt rules regarding money transmitters and other insurance-related requirements, rather than making it mandatory. It would also modify reporting requirements for risk retention groups and eliminate Arizona's opt-out status from uniform standards for long-term care insurance products. Outdated language concerning renewal processes and penalties would be replaced with clearer stipulations about late fees and consequences for failing to renew on time, ultimately aiming to streamline the licensing process and enhance regulatory efficiency.
HB 2193 Captive Insurers; Certificate of Dormancy (Livingston): HB 2193 will be heard in the House Commerce Committee on Tuesday afternoon. The bill proposes several updates to the Arizona Revised Statutes concerning captive insurers. It introduces a new definition for "dormant captive insurer," which refers to a captive insurer that has ceased transacting insurance business and has no outstanding liabilities. The bill also establishes a process for dormant captive insurers to apply for a certificate of dormancy, which must be renewed every five years. Additionally, it sets forth requirements for maintaining capital and surplus, submitting annual financial reports, and the conditions under which a certificate of dormancy may be revoked or surrendered. Furthermore, the bill modifies existing definitions and requirements related to captive insurers, including changes to the terminology used for certain entities, such as "board of managers" instead of "board of directors" for limited liability companies. It also reduces the minimum capital requirement for protected cell captive insurers from $500,000 to $250,000 and specifies that at least one member of the board of managers for limited liability companies must be a resident of Arizona. Overall, these updates aim to streamline the regulatory framework for captive insurers and enhance compliance measures.
HB 2228 Jurors; Peremptory Challenge; Civil Action (Hendrix): HB 2228 will be heard in the House Judiciary Committee on Wednesday morning. The bill restores peremptory challenges for civil cases in Arizona. The bill stipulates that each party is entitled to four peremptory challenges. Beginning with the plaintiff, each party shall alternate striking jurors until all the challenges are used or waved. Under HB 2228, the court may allow a party additional peremptory challenges if two or more parties on the same side have adverse or hostile interests. If the court allows a party an additional peremptory challenge, the court shall allow an equal number of peremptory challenges to the party or parties on the other side.
SB 1094 Business; Discrimination Prohibition; Social Criteria (Hoffman): SB 1094 will be heard in the Senate Government Committee on Wednesday morning. This bill proposes to amend existing Arizona statutes by adding new sections that prohibit discrimination by financial institutions, insurers, and credit reporting agencies based on political affiliation and various social credit scores. Specifically, it introduces provisions that ensure these entities cannot refuse service or discriminate against individuals based on their political beliefs or scores related to social justice, environmental impact, or governmental criteria. Additionally, the bill allows these institutions to offer products or services that include subjective standards, provided that such standards are fully disclosed to customers prior to contract agreements. Furthermore, the bill emphasizes that the practice of discrimination based on social credit scores is a matter of statewide concern, asserting that it threatens the rights of individuals and the foundational principles of a democratic state. It clarifies that these new regulations do not impede the ability of these institutions to refuse service when necessary for the safety of their employees. If this were to pass, the Governor would likely veto the bill.
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